Exhibit 10.25
EXECUTION COPY
COLLATERAL TRUST AGREEMENT
DATED AS OF JULY 16, 2003
AMONG
CALPINE CORPORATION,
QUINTANA MINERALS (USA), INC.,
JOQ CANADA, INC.,
QUINTANA CANADA HOLDINGS LLC,
THE BANK OF NOVA SCOTIA,
AS AGENT UNDER THE CREDIT AGREEMENT,
WILMINGTON TRUST COMPANY,
AS TRUSTEE UNDER THE 2007 INDENTURE,
WILMINGTON TRUST COMPANY,
AS TRUSTEE UNDER THE 2010 INDENTURE,
WILMINGTON TRUST COMPANY,
AS TRUSTEE UNDER THE 2013 INDENTURE,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS ADMINISTRATIVE AGENT UNDER THE TERM LOAN AGREEMENT,
AND
THE BANK OF NEW YORK,
AS COLLATERAL TRUSTEE
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION............................................................... 2
1.1. Defined Terms.................................................................................... 2
1.2. Rules of Interpretation.......................................................................... 22
ARTICLE 2. THE TRUST ESTATE...................................................................................... 23
2.1. Declaration of Trust............................................................................. 23
ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE.......................................................... 24
3.1. Undertaking of the Collateral Trustee............................................................ 24
3.2. Release or Subordination of Liens................................................................ 25
3.3. Remedies Upon Actionable Default................................................................. 25
3.4. Application of Proceeds.......................................................................... 26
3.5. Powers of the Collateral Trustee................................................................. 27
3.6. Documents and Communications..................................................................... 27
3.7. For Sole and Exclusive Benefit of Holders of Secured Obligations................................. 27
3.8. Additional Secured Debt.......................................................................... 27
ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE COMPANY AND THE CANADIAN GUARANTORS.................................... 29
4.1. Release of Liens................................................................................. 29
4.2. Delivery of Copies to Secured Debt Representatives............................................... 31
4.3. Collateral Trustee not Required to Serve, File or Record......................................... 31
ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE.................................................................. 31
5.1. No Implied Duty.................................................................................. 31
5.2. Appointment of Agents and Advisors............................................................... 31
5.3. Other Agreements................................................................................. 32
5.4. Solicitation of Instructions..................................................................... 32
5.5. Limitation of Liability.......................................................................... 32
5.6. Documents in Satisfactory Form................................................................... 32
5.7. Entitled to Rely................................................................................. 32
5.8. Secured Debt Default............................................................................. 33
5.9. Actions by Collateral Trustee.................................................................... 33
5.10. Security or Indemnity in favor of the Collateral Trustee........................................ 33
5.11. Rights of the Collateral Trustee................................................................ 33
5.12. Limitations on Duty of Collateral Trustee in Respect of Collateral.............................. 33
5.13. Assumption of Rights, Not Assumption of Duties.................................................. 34
5.14. No Liability for Clean Up of Hazardous Materials................................................ 34
ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE..................................................... 34
6.1. Resignation or Removal of Collateral Trustee..................................................... 34
6.2. Appointment of Successor Collateral Trustee...................................................... 35
6.3. Succession....................................................................................... 35
6.4. Limitation....................................................................................... 35
ARTICLE 7. MISCELLANEOUS PROVISIONS.............................................................................. 35
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7.1. Amendment........................................................................................ 35
7.2. Further Assurances............................................................................... 36
7.3. Successors and Assigns........................................................................... 37
7.4. Delay and Waiver................................................................................. 37
7.5. Notices.......................................................................................... 37
7.6. Entire Agreement................................................................................. 39
7.7. Compensation; Expenses........................................................................... 39
7.8. Indemnity........................................................................................ 40
7.9. Severability..................................................................................... 41
7.10. Headings........................................................................................ 41
7.11. Obligations Secured............................................................................. 41
7.12. Governing Law................................................................................... 41
7.13. Consent to Jurisdiction......................................................................... 41
7.14. Waiver of Jury Trial............................................................................ 41
7.15. Counterparts.................................................................................... 42
7.16. Effectiveness................................................................................... 42
7.17. Additional Obligors............................................................................. 42
7.18. Appointment of Sub-Agent for Control Agreements................................................. 42
7.19. Transfer of the Existing Security Documents..................................................... 43
List of Exhibits and Schedules
Exhibit A Collateral Trust Joinder
Exhibit B Notice of Advance
Schedule 1 Existing Security Documents
Schedule 2 Instruments of Transfer for Existing Security Documents
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COLLATERAL TRUST AGREEMENT
This Collateral Trust Agreement, dated as of July 16, 2003
(this "Agreement"), is entered into by and among Calpine Corporation, a Delaware
corporation (the "Company"), Quintana Minerals (USA), Inc., a Delaware
corporation, JOQ Canada, Inc., a Delaware corporation, Quintana Canada Holdings
LLC, a Delaware limited liability company, The Bank of Nova Scotia, as Credit
Agreement Agent, Wilmington Trust Company, as Trustee under the 2007 Indenture,
Wilmington Trust Company, as Trustee under the 2010 Indenture, Wilmington Trust
Company, as Trustee under the 2013 Indenture, Goldman Sachs Credit Partners
L.P., as Term Loan Administrative Agent, and The Bank of New York, as Collateral
Trustee (together with its successors in such capacity, the "Collateral
Trustee").
RECITALS
1. The Company is party to a Credit Agreement dated as
of March 8, 2002 (as amended, the "Existing Credit Agreement") among, inter
alia, the Company, the Lenders referred to therein and The Bank of Nova Scotia,
as Administrative Agent, relating to (i) an approximately $570 million revolving
credit facility and (ii) a $1.0 billion term loan facility. The payment of the
principal of and interest on the loans and the payment of all other obligations
under the Existing Credit Agreement are secured by Liens held by The Bank of
Nova Scotia, as Agent under the Existing Credit Agreement (the "Existing
Collateral Agent") pursuant to the security documents listed on Schedule 1 (the
"Existing Security Documents"). All Obligations under the Existing Credit
Agreement (as defined therein) are guaranteed by each of the Canadian
Guarantors. The obligations of each of the Canadian Guarantors under their
respective Guarantees are limited to such Canadian Guarantor's ownership
interest in Calpine Canada Energy Ltd., a Nova Scotia limited liability company
("CCEC"), that has been pledged to the Existing Collateral Agent.
2. The Company intends to enter into an Amended and
Restated Credit Agreement dated as of July 16, 2003 among, inter alia, the
Company, the Lenders referred to therein and The Bank of Nova Scotia, as
Administrative Agent, relating to a $500,000,000 senior secured credit facility
to be made available in the form of revolving loans and term loans, including
letters of credit to be issued thereunder.
3. The Company intends to (a) issue $500,000,000 in
aggregate principal amount of Second Priority Senior Secured Floating Rate Notes
due 2007 (the "2007 Notes") pursuant to the Indenture dated as of July 16, 2003
(the "2007 Indenture") between the Company and Wilmington Trust Company, as
Trustee (together with its successors in such capacity, the "2007 Trustee"), (b)
issue $1,150,000,000 in aggregate principal amount of 8.50% Second Priority
Senior Secured Notes due 2010 (the "2010 Notes") pursuant to the Indenture dated
as of July 16, 2003 (the "2010 Indenture") between the Company and Wilmington
Trust Company, as Trustee (together with its successors in such capacity, the
"2010 Trustee"), (c) issue $900,000,000 in aggregate principal amount of 8.75%
Second Priority Senior Secured Notes due 2013 (the "2013 Notes") pursuant to the
Indenture dated as of July 16, 2003 (the "2013
Indenture") between the Company and Wilmington Trust Company, as Trustee
(together with its successors in such capacity, the "2013 Trustee"), and (d)
borrow $750,000,000 in Term Loans pursuant to a Credit Agreement dated as of
July 16, 2003 between the Company and Goldman Sachs Credit Partners L.P., as
Administrative Agent. The proceeds from the offering of the 2007 Notes, the 2010
Notes and the 2013 Notes and the borrowing of the Term Loans will be used, among
other things, to refinance the loans outstanding under the Existing Credit
Agreement.
4. The Company intends to secure its Secured
Obligations, including its obligations under the Credit Agreement and any future
Priority Lien Debt, on a priority basis, and, subject to such priority, its
obligations under the 2007 Notes, 2010 Notes, 2013 Notes and Term Loans and any
future Parity Lien Debt equally and ratably, with security interests in all
present and future property of the Company, except Excluded Assets. The Canadian
Guarantors intend to Guarantee all Secured Obligations and to secure such
Guarantees by pledging 65% of the aggregate outstanding voting stock of CCEC.
The obligations of each of the Canadian Guarantors under their respective
Guarantees are limited to such Canadian Guarantor's ownership interest in CCEC
that has been pledged to the Collateral Trustee.
5. This Agreement sets forth the terms on which the
Company has appointed the Collateral Trustee as trustee for the present and
future holders of the Secured Obligations to accept transfer of the Existing
Security Documents and to receive, hold, maintain, administer, enforce and
distribute the Security Documents, including all Guarantees granted thereunder,
at any time delivered to the Collateral Trustee and all interests, rights,
powers and remedies of the Collateral Trustee thereunder and the proceeds
thereof.
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
1.1. DEFINED TERMS.
(a) The following terms shall have the following
meanings:
"Act of Instructing Debtholders" means, as to any matter at
any time, a direction in writing delivered to the Collateral Trustee by or with
the written consent of the holders of Priority Lien Debt or Parity Lien Debt
holding more than 50% of the aggregate outstanding principal amount of all
Priority Lien Debt and Parity Lien Debt that is then due and payable, voting
together as a single class. For this purpose, Parity Lien Debt or Priority Lien
Debt registered in the name of, or beneficially owned by, the Company or any
Affiliate of the Company will be deemed not to be outstanding.
"Act of Secured Debtholders" means, as to any matter, a
direction in writing delivered to the Collateral Trustee by or with the written
consent of:
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(1) the Required Parity Debtholders accompanied by written confirmation
from each Parity Debt Representative in respect of each Series of Parity Lien
Debt then outstanding (in form reasonably satisfactory to such Parity Debt
Representative and the Collateral Trustee) as to the principal amount of Parity
Lien Debt registered by that Parity Debt Representative as outstanding in the
name of any consenting holder of Parity Lien Debt who is a holder of such Series
of Parity Lien Debt; and
(2) the Required Priority Debtholders.
"Actionable Default" means (1) the failure to pay any
principal of or interest on any Series of Secured Debt outstanding in the amount
of $50.0 million or more resulting in an event of default under the applicable
Series of Secured Debt after payment is due, including payments that are due (or
if any required offer had been timely made would be due) in respect of any
mandatory offer to purchase Secured Debt resulting in an event of default under
the applicable Series of Secured Debt, (2) the failure to pay in full, when due
and payable in full (whether at maturity, upon acceleration or otherwise), any
Series of Secured Debt outstanding in the amount of $50.0 million or more, (3)
the exercise by the Collateral Trustee or any of its co-trustees or agents
(including the Priority Lien Agent) of any right or power that is exercisable by
it only upon default to take sole and exclusive dominion and control over any
Collateral consisting of a deposit in a deposit account, commodity contract in a
commodity account or financial asset in a securities account constituting
Collateral or the delivery of any instructions to the Collateral Trustee
directing it to foreclose or otherwise enforce, or to distribute the proceeds of
enforcement of, any Lien upon any Collateral or (4) the occurrence of any event
of default under any indenture or agreement governing any Series of Secured Debt
arising from the commencement of any Bankruptcy Case or Insolvency Proceeding.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP; provided, that if such sale and leaseback transaction results in a Capital
Lease Obligation, the amount of Indebtedness represented thereby will be
determined in accordance with the definition of "Capital Lease Obligation."
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"Bankruptcy Case" means any case under Title 11 of the United
States Code or any successor bankruptcy law commenced voluntarily or
involuntarily against the Company or any other Obligor.
"Board of Directors" means:
(1) with respect to a corporation, the Board of Directors of the corporation
or any committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership;
(3) with respect to a limited liability company, the managing member or
members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person
serving a similar function.
"Canadian Guarantors" means Quintana Minerals (USA), Inc., a
Delaware corporation, JOQ Canada, Inc., a Delaware limited liability company and
Quintana Canada Holdings LLC, a Delaware limited liability company, and any
successor to any of the foregoing.
"Capital Lease Obligation" means, at the time any
determination is to be made, the amount of the liability in respect of a capital
lease that would at that time be required to be capitalized on a balance sheet
in accordance with GAAP, and the Stated Maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be prepaid by the lessee without payment of
a penalty.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability
company, partnership interests (whether general or limited) or membership
interests; and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, but excluding from all of the
foregoing any debt securities convertible into Capital Stock, whether or not
such debt securities include any right of participation with Capital Stock.
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"Cash Equivalents" means:
(1) the lawful currency of any country where the Company owns or
operates a Facility;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any state thereof (or any agency or
instrumentality thereof), by the Canadian government (or any agency or
instrumentality thereof), or by the government of a member state of the
European Union (or any agency or instrumentality thereof), in each case the
payment of which is backed by the full faith and credit of the United
States, Canada or the relevant member state of the European Union, as the
case may be, and having maturities of not more than six months from the date
of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or
with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch or successor rating agency rating of
"B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having one of the two highest ratings obtainable
from Moody's or S&P and maturing within six months after the date of
acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through (5) of
this definition.
"Collateral" means all properties and assets at any time owned
or acquired by the Company, except the Excluded Assets, and the Canadian
Guarantors' ownership interest in 65% of the aggregate outstanding voting stock
of CCEC.
"Collateral Trust Joinder" means an agreement substantially in
the form of Exhibit A hereto.
"Consolidated Cash Flow" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period plus, without duplication:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in computing
such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(3) the Fixed Charges of such Person and its Restricted Subsidiaries
for such period, to the extent that such Fixed Charges were deducted in
computing such Consolidated Net Income; plus
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(4) depreciation, amortization (including amortization of intangibles
but excluding amortization of prepaid cash expenses that were paid in a
prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that
was paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net Income;
minus non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business;
in each case, on a consolidated basis and determined in
accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends or
similar distributions paid in cash to the specified Person or a Restricted
Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income is
not at the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable
to that Restricted Subsidiary or its stockholders; and
(3) the cumulative effect of a change in accounting principles
will be excluded.
"Control Agreement" means an agreement granting control over a
deposit account or deposits therein, a commodity account or commodity contracts
carried therein or a securities account or financial assets credited thereto, as
security for any Secured Obligations.
"Credit Agreement" means that certain Amended and Restated
Credit Agreement, dated as of July 16, 2003, by and among the Company and the
Credit Agreement Agent, providing for up to $500.0 million of revolving credit
and term loan borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, restated, modified, renewed, refunded, replaced or
refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part from time to time.
"Credit Agreement Agent" means, at any time, the Person
serving at such time as the "Agent" or "Administrative Agent" under the Credit
Agreement or any other representative of the Lenders then most recently
designated by a majority of the Lenders, in a written notice
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delivered to each Parity Debt Representative and the Collateral Trustee, as the
Credit Agreement Agent for the purposes of each of the Parity Lien Debt
Documents.
"Credit Facilities" means one or more debt facilities
(including the Credit Agreement) with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced (including by means of sales of debt securities to
institutional investors) in whole or in part from time to time.
"Designated Assets" means all geothermal energy assets
(including any related extraction, processing or similar equipment and
geothermal power plants) and all natural gas assets (including any related
extraction, processing or similar equipment, other than natural gas power
plants) owned by the Company or any of its Restricted Subsidiaries from time to
time, including the equity interests of any Restricted Subsidiary owning any
Designated Assets, but excluding (i) any geothermal energy assets that are both
unproven and undeveloped and (ii) contracts for the purchase or sale of natural
gas and natural gas supplied under such contracts.
"Disqualified Stock" means, with respect to any indenture, any
Capital Stock that, by its terms (or by the terms of any security into which it
is convertible, or for which it is exchangeable, in each case at the option of
the holder of the Capital Stock), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or redeemable at the option of the holder of the Capital Stock, in whole or in
part, on or prior to the date that is 91 days after the date on which the notes
issued pursuant to such indenture mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders of the Capital Stock have the right to require the Company
to repurchase such Capital Stock upon the occurrence of a change of control or
an asset sale will not constitute Disqualified Stock. The amount of Disqualified
Stock deemed to be outstanding at any time for purposes of the applicable
indenture will be the maximum amount that the Company and its Restricted
Subsidiaries may become obligated to pay upon the maturity of, or pursuant to
any mandatory redemption provisions of, such Disqualified Stock, exclusive of
accrued dividends.
"Environmental Laws" means all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
the Hazardous Materials Transportation Authorization Act of 1994, the Federal
Insecticide, Fungicide, and Rodenticide Act, the Solid Waste Disposal Act, the
Toxic Substance Control Act, the Clean Air Act, the Federal Water Pollution
Control Act, the Occupational Safety and Health Act and the Safe Drinking Water
Act, and any and all regulations promulgated thereunder, and all analogous
state, local and foreign counterparts or equivalents.
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"Environmental Liabilities" means, with respect to any Person,
all liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law arising under or related to
any Environmental Laws (including any permits or other authorizations required
under any Environmental Laws) or in connection with any Release or threatened
Release or presence of a Hazardous Material whether on, at, in, under, from or
about or in the vicinity of any real or personal property of the Company and its
Subsidiaries.
"equally and ratably" means, in reference to sharing of Liens
or proceeds thereof as between the holders of Parity Lien Obligations with
respect to each outstanding Series of Parity Lien Debt, that such Liens or
proceeds:
(1) shall be allocated and distributed first to each Parity
Debt Representative for each outstanding series of Parity Lien Debt, for
account of the holders of such Series of Parity Lien Debt, ratably in
proportion to the principal of and interest and premium (if any) outstanding
on each outstanding Series of Parity Lien Debt when the allocation or
distribution is made, and thereafter
(2) shall be allocated and distributed (if any remain after
payment in full of all of the principal of and interest and premium (if any) on
all outstanding Parity Lien Debt) to each Parity Debt Representative for each
outstanding series of Parity Lien Debt, for account of the holders of any
remaining Parity Lien Obligations with respect to such outstanding Series of
Parity Lien Debt, ratably in proportion to the aggregate unpaid amount of such
remaining Parity Lien Obligations due and demanded (with written notice to the
applicable Parity Debt Representative and the Collateral Trustee) prior to the
date such distribution is made.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Excluded Assets" means (1) any lease of property other than
(i) a lease of a geothermal energy or natural gas interest or property, (ii) a
lease of real estate underlying a power generation property or (iii) a capital
lease;
(2) all deposit accounts (as defined in Article 9 of the Uniform
Commercial Code of any relevant jurisdiction) and deposits therein to the
extent not exceeding $50.0 million in the aggregate, except for the
Designated Assets Sale Proceeds Account (as defined in each of the 2007
Indenture, the 2010 Indenture and the 2013 Indenture) and any deposit
account and deposits therein holding amounts referred to in clause (7) of
this definition;
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(3) the fixtures and equipment relating to any pipeline if, to the
extent that and for so long as (i) the ownership or operation of such
pipeline is regulated by any federal or state regulatory authority and (ii)
under the law applicable to such regulatory authority the grant of a
security interest in such fixtures and equipment is prohibited or a security
interest in such fixtures and equipment may be granted only after completion
of a filing with, or receipt of consent from, such regulatory authority
which has not been effectively completed or received; provided, that (a)
such fixtures and equipment will be an Excluded Asset only to the extent and
for so long as the conditions set forth in clauses (i) and (ii) in this
clause (3) are and remain satisfied and to the extent such assets otherwise
constitute Collateral, will cease to be an Excluded Asset, and will become
subject to the security interests granted to the Collateral Trustee under
the Security Documents immediately and automatically at such time as such
conditions cease to exist, including by reason of the effective completion
of any required filing or effective receipt of any required regulatory
approval, and (b) unless prohibited by law, the proceeds of any sale, lease
or other disposition of any such fixtures or equipment that are Excluded
Assets shall not be an Excluded Asset and shall at all times be and remain
subject to the security interests granted to the Collateral Trustee under
the Security Documents, except as such proceeds are applied and used by the
Company in the ordinary course of business and applied in accordance with
the applicable terms and provisions of each of the Secured Debt Documents;
(4) all easements, rights-of-way, licenses and other real property
interests for or pertaining to the construction, operation, use or
maintenance of any pipeline over, upon or under land owned by another
Person;
(5) with respect to personal property, any lease, license, permit,
franchise, power, authority or right if, to the extent that and for so long
as (i) the grant of a security interest therein constitutes or would result
in the abandonment, invalidation or unenforceability of such lease, license,
permit, franchise, power, authority or right or the termination of or a
default under the instrument or agreement by which such lease, license,
permit, franchise, power, authority or right is governed and (ii) such
abandonment, invalidation, unenforceability, termination or default is not
rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of
the Uniform Commercial Code (or any successor provisions) of any relevant
jurisdiction or any other applicable law (including the United States
bankruptcy code); provided, that (a) such lease, license, permit, franchise,
power, authority or right will be an Excluded Asset only to the extent and
for so long as the conditions set forth in clauses (i) and (ii) of this
clause (5) are and remain satisfied and to the extent that such assets
otherwise constitute Collateral, will cease to be an Excluded Asset, and
will become subject to the security interests granted to the Collateral
Trustee under the Security Documents immediately and automatically at such
time as such conditions cease to exist, including by reason of any waiver or
consent under the applicable instrument or agreement, and (b) the proceeds
of any sale, lease or other disposition of any such lease, license, permit,
franchise, power, authority or right that is or becomes an Excluded Asset
shall not be an Excluded Asset and shall at all times be and remain subject
to the security interests granted to the Collateral Trustee under the
Security Documents, except as such proceeds are applied and used by the
Company in the ordinary course of business and applied in accordance with
the applicable terms and provisions of each of the Secured Debt Documents;
9
(6) with respect to any real property, any lease, license, permit,
franchise, power, authority or right if, to the extent that and for so long
as the grant of a security interest therein (i) requires a third party
consent which has not been obtained or (ii) constitutes or would result in
the abandonment, invalidation or unenforceability of such lease, license,
permit, franchise, power, authority or right or the termination of or a
default under the instrument or agreement by which such lease, license,
permit, franchise, power, authority or right is governed; provided, that
such lease, license, permit, franchise, power, authority or right will be an
Excluded Asset only to the extent and for as long as the conditions set
forth in clause (i) or (ii) of this clause (6) are and remain satisfied and
to the extent such assets otherwise constitute Collateral, will cease to be
an Excluded Asset, and will become subject to the security interests granted
to the Collateral Trustee under the Security Documents immediately and
automatically at such time as such conditions cease to exist, except as such
proceeds are applied and used by the Company in the ordinary course of
business and applied in accordance with the applicable terms and provisions
of each of the Secured Debt Documents;
(7) any cash proceeds (including any earnings thereon) of Priority Lien
Debt that are pledged to cash collateralize letters of credit;
(8) any turbines which serve as collateral pursuant to that certain
General Agreement dated as of January 31, 2002 among the Company, various
Subsidiaries of the Company and Siemens Westinghouse Power Corporation
relating to various purchase contracts and letters of intent for gas turbine
generators, steam turbine generators and related accessories;
(9) proved oil and gas reserves located in Oklahoma and undeveloped
reserves and unproven acreage located in California, Texas, Wyoming,
Montana, Colorado, New Mexico and offshore Louisiana; provided that such
reserves and acreage has a Fair Market Value not exceeding $20.0 million in
the aggregate;
(10) Capital Stock of Subsidiaries designated by the Company, but only
for so long as (i) the Capital Stock of such Subsidiaries is not pledged to
any Person (other than the Collateral Trustee on behalf of all holders of
all Secured Debt) and (ii) such Subsidiaries collectively own less than 5.0%
of the Company's total consolidated assets and collectively account for less
than 5.0% of the Company's Consolidated Cash Flow; and
(11) any other property in which a security interest cannot be perfected
by the filing of a financing statement under the Uniform Commercial Code of
the relevant jurisdiction; provided that such property has a Fair Market
Value not exceeding $25.0 million in the aggregate.
"Facility" means a power generation facility or energy
producing facility, including any related fuel reserves.
"Fair Market Value" means the value that would be paid by a
willing buyer to a willing seller in a transaction not involving distress or
necessity of either party, determined
10
in good faith by the Board of Directors of the Company (unless otherwise
provided in the 2007 Indenture, the 2010 Indenture or the 2013 Indenture).
"Fixed Charges" means, with respect to any specified Person
for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings,
and net of the effect of all payments made or received pursuant to Hedging
Obligations in respect of interest rates, plus one-third of all payments
with respect to operating leases; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period, except interest on
Indebtedness incurred to finance the development or construction of a
Facility; plus
(3) any interest accruing on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such Guarantee or Lien is called upon, but excluding any such
Guarantee or Lien in effect on the date of the indentures unless the same is
called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, other than dividends on Equity Interests
payable solely in Equity Interests of the Company (other than Disqualified
Stock) or to the Company or a Restricted Subsidiary of the Company, times
(b) a fraction, the numerator of which is one and the denominator of which
is one minus the effective combined federal, state and local statutory tax
rate of such Person for the immediately preceding fiscal year, expressed as
a decimal, in each case, on a consolidated basis and in accordance with
GAAP.
"GAAP" means generally accepted accounting principles set
forth in the statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have
been approved by a significant segment of the accounting profession, which
are in effect and, to the extent optional, adopted by the Company, on the
applicable date of determination.
"Guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner including by way of a pledge of assets or
through letters of credit or reimbursement agreements in respect thereof, of
all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods,
11
securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"Hazardous Material" means any substance, material or waste
that is regulated by, or forms the basis of liability now or hereafter under,
any Environmental Laws, including any material or substance that is (i) defined
as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, or (ii)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"Hedging Obligations" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate
collar agreements;
(2) other agreements or arrangements designed to manage interest rate
risk; and
(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices.
"Indebtedness" means, with respect to any specified Person,
any indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations or Attributable Debt in
respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the purchase price
of any property or services due more than six months after such property is
acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person.
12
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other
Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on
the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such asset at such date of determination,
and
(B) the amount of the Indebtedness of such other Person.
Notwithstanding anything to the contrary in this definition of Indebtedness,
with respect to any contingent obligations (other than with respect to
contractual obligations to repurchase goods sold or distributed, which shall be
included to the extent reflected on the balance sheet of such Person in
accordance with GAAP) of a Person, the maximum liability of such Indebtedness
shall be as determined by such Person's Board of Directors, in good faith, as,
in light of the facts and circumstances existing at the time, reasonably likely
to be incurred upon the occurrence of the contingency giving rise to such
obligation.
"Indemnified Liabilities" means any and all liabilities
(including all Environmental Liabilities), obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, performance,
administration or enforcement of this Agreement or any of the other Security
Documents, including any of the foregoing relating to the use of proceeds of any
Secured Debt or the violation of, noncompliance with or liability under, any law
(including Environmental Laws) applicable to or enforceable against the Company
or any of its Subsidiaries or any of the Collateral and all reasonable costs and
expenses (including reasonable fees and expenses of legal counsel selected by
the Indemnitee) incurred by any Indemnitee in connection with claim, action,
investigation or proceeding in any respect relating to any of the foregoing,
whether or not suit is brought.
"Indemnitee" has the meaning given in Section 7.8(a).
"Insolvency Proceeding" means:
(1) any proceeding for the reorganization, recapitalization or
adjustment or marshalling of the assets or liabilities of the Company or any
other Obligor, any receivership or assignment for the benefit of creditors
relating to the Company or any other Obligor or any similar case or
proceeding relative to the Company or any other Obligor or its creditors, as
such, in each case whether or not voluntary;
13
(2) any liquidation, dissolution, marshalling of assets or liabilities
or other winding up of or relating to the Company or any other Obligor, in
each case whether or not voluntary and whether or not involving bankruptcy
or insolvency; or
(3) any other proceeding of any type or nature in which substantially
all claims of creditors of the Company or any other Obligor are determined
and any payment or distribution is or may be made on account of such claims.
"Lenders" means, at any time, the parties to the Credit
Agreement then holding (or committed to provide) loans, letters of credit or
other extensions of credit that constitute (or when provided will constitute)
Priority Lien Debt outstanding under the Credit Agreement.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction.
"Moody's" means Moody's Investors Service, Inc. (or, if such
entity ceases to rate the applicable notes for reasons outside of the control of
the Company, the equivalent investment grade credit rating from any other
"nationally recognized statistical rating organization" (or successor concept)
within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act (or
successor provision) selected by the Company as a replacement agency).
"Net Income" means, with respect to any specified Person, the
net income (loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however,
without duplication:
(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with: (a) any
Asset Sale; or (b) the disposition of any securities by such Person or any
of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" mean the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as
a result of the Asset Sale, taxes paid or payable as a result of the Asset
Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, and amounts required to be
applied to the repayment of Indebtedness, other than Priority Debt, secured
by a Lien on the asset or assets that were the subject of such Asset Sale
and any
14
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness of any Restricted
Subsidiary that is incurred to finance the exploration, drilling,
development, construction or purchase of or by, or repairs, improvements or
additions to, property or assets of the Company or any Restricted
Subsidiary; provided that such Indebtedness is without recourse to the
Company (except as permitted by clause (8) of the definition of Permitted
Debt) or any Restricted Subsidiary or to any property or assets of the
Company or any Restricted Subsidiary other than property or assets
(including Capital Stock) of a Restricted Subsidiary subject to a Lien
permitted pursuant to clause (8) of the definition of Permitted Liens or
property or assets (including Capital Stock) of a Restricted Subsidiary
subject to a Lien permitted pursuant to clause (19) of the definition of
Permitted Liens.
"Note Documents" means each of the 2007 Indenture, the 2010
Indenture and the 2013 Indenture, each of the 2007 Notes, the 2010 Notes and the
2013 Notes, each Sharing Confirmation and the Security Documents.
"Notice of Actionable Default" means a written notice given to
the Collateral Trustee by the Required Parity Debtholders or any Parity Debt
Representative, or the Required Priority Debtholders, stating that an Actionable
Default has occurred and is continuing.
"Notice of Advance" means a written notice substantially in
the form of Exhibit B hereto.
"Obligations" means any principal, interest (including any
interest accruing at the then applicable rate provided in any applicable Secured
Debt Document after the maturity of the loans and reimbursement obligations
therein and interest accruing at the then applicable rate provided in any
applicable Secured Debt Document after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Company, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"Obligor" means the Company, the Canadian Guarantors and each
other Restricted Subsidiary of the Company (if any) that at any time guarantees
or provides collateral security or credit support for any Secured Obligations.
"Officer's Certificate" means a written certificate signed by
the Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Vice-President of the Company.
"Opinion of Company Counsel" means a written opinion from
independent legal counsel who is reasonably acceptable to the Collateral Trustee
or the Company's chief legal officer or deputy chief legal officer. The opinion
may include exceptions and qualifications
15
consistent with customary practice for written third party legal opinions
relating to the subject matter of the opinion.
"Parity Debt Representative" means:
(1) in the case of the 2007 Notes, the 2007 Trustee; in the case of the
2010 Notes, the 2010 Trustee; in the case of the 2013 Notes, the 2013
Trustee;
(2) in the case of the Term Loans, the Term Loan Administrative Agent;
or
(3) in the case of any other Series of Parity Debt, the trustee, agent
or representative of the holders of such Series of Parity Lien Debt who
maintains the transfer register for such Series of Parity Lien Debt and is
appointed as a Parity Debt Representative (for purposes related to the
administration of the security documents) pursuant to the indenture or other
agreement governing such Series of Parity Lien Debt.
"Parity Lien" means a Lien granted by a Security Document to
the Collateral Trustee upon any property of the Company or any other Obligor to
secure Parity Lien Obligations.
"Parity Lien Debt" means:
(1) the 2007 Notes, the 2010 Notes and the 2013 Notes;
(2) the Term Loans; and
(3) any other Indebtedness (including additional notes and Term Loans) that:
(A) is permitted to be incurred by the covenant described in Section
4.12 of each of the 2007 Indenture, the 2010 Indenture and the 2013
Indenture; and
(B) is permitted to be secured by Parity Liens by clause (2) of the
definition of Permitted Liens set forth in each of the 2007 Indenture, the
2010 Indenture and the 2013 Indenture;
provided, in the case of each issue or series of Indebtedness referred to in
this clause (3), that:
(i) on or before the date on which such Indebtedness was incurred by the
Company such Indebtedness is designated by the Company, in an officer's
certificate delivered to each Parity Debt Representative and the Collateral
Trustee on or before such date, as Parity Lien Debt for the purposes of each
of the 2007 Indenture, the 2010 Indenture and the 2013 Indenture and this
Agreement,
(ii) such Indebtedness is governed by an indenture or other agreement
that includes a Sharing Confirmation and
16
(iii) all requirements set forth in this Agreement as to the
confirmation, grant or perfection of the Collateral Trustee's Liens to
secure such Indebtedness or Obligations in respect thereof are satisfied
(and the satisfaction of such requirements and the other provisions of this
clause (3) shall be conclusively established, for purposes of entitling the
holders of such Indebtedness to share equally and ratably with the other holders
of Parity Lien Debt in the benefits and proceeds of the Collateral Trustee's
Liens on the Collateral, if the Company complies with all of the provisions set
forth in Section 3.8 of this Agreement, and the holders of such Indebtedness and
Obligations in respect thereof will be entitled to rely conclusively thereon).
"Parity Lien Debt Documents" means, collectively, the Term
Loan Documents, the Note Documents, and the indenture or agreement governing
each other Series of Parity Lien Debt and all agreements binding on any Obligor
related thereto.
"Parity Lien Obligations" means Parity Lien Debt and all other
Obligations in respect thereof.
"Permitted Prior Liens" means (a) Liens securing Priority Lien
Obligations not exceeding the Priority Lien Cap, (b) Liens described in clauses
(5), (6), (10) or (11) of the definition of "Permitted Liens" (as defined in the
Parity Lien Debt Documents) and (c) Liens that arise by operation of law and are
not voluntarily granted, to the extent entitled by law to priority over the
security interests created by the Security Documents.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Pledged Power Project" means the power generation property
and related equipment at each of the following locations:
(1) the Goldendale Energy Center in Goldendale, Washington;
(2) the Otay Mesa Energy Center near San Diego, California;
(3) the Metcalf Energy Center near San Jose, California;
(4) the Santa Rosa Energy Center in Santa Rosa County, Florida;
(5) the Washington Parish Energy Center near Bogalusa, Louisiana;
(6) the Deer Park Energy Center in Deer Park, Texas; and
(7) the Augusta Energy Center in Augusta, Georgia.
17
"Priority Foreclosure Event" means the failure to pay at
maturity or upon acceleration of maturity all outstanding Priority Lien Debt at
any time when no Bankruptcy Case or Insolvency Proceeding is pending.
"Priority Lien" means a Lien granted by a Security Document to
the Collateral Trustee upon any property of the Company or any other Obligor to
secure Priority Lien Obligations not exceeding the Priority Lien Cap.
"Priority Lien Agent" means the Credit Agreement Agent or any
other agent for holders of Priority Lien Debt.
"Priority Lien Cap" means an amount equal to (a) the
Indebtedness outstanding under the Credit Agreement or any other Credit Facility
in an aggregate principal amount not exceeding the greater of (1) $500.0
million, less the amount of any Net Proceeds of a Sale of Designated Assets
applied to repay Priority Lien Debt and/or cash collateralize letters of credit
that constitute Priority Lien Debt and (2) the dollar amount that, on the date
of incurrence of such Indebtedness, is equal to 50% of the Company's
Consolidated Cash Flow for the then most recent four-quarter period for which
financial information is available, plus (b) any interest (including any
interest accruing at the then applicable rate provided in any applicable
Priority Lien Document after the maturity of the loans and reimbursement
obligations therein and interest accruing at the then applicable rate provided
in any applicable Priority Lien Document after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), penalties, premiums,
fees, costs, expenses or other Obligations in respect of such Indebtedness. For
purposes of this definition of Priority Lien Cap, all letters of credit shall be
valued at face amount, whether or not drawn, and all letters of credit
denominated in a currency other than U.S. dollars shall be valued at all times
at the Equivalent Amount (as defined in the Credit Agreement) thereof on the
date of issue thereof.
"Priority Lien Debt" means Indebtedness under (a) the Credit
Agreement or (b) any other Credit Facility that is secured by a Priority Lien
that was permitted to be incurred under clause (1) of the definition of
"Permitted Liens" but only if on or before the day on which such Indebtedness
under a Credit Facility described in clause (b) above is incurred by the Company
such Indebtedness is designated by the Company, in an officer's certificate
delivered to each Parity Debt Representative and the Collateral Trustee on or
before such date, as Priority Lien Debt for the purposes of each of the Parity
Lien Debt Documents and this Agreement.
"Priority Lien Documents" means the Credit Agreement or any
other Credit Facility pursuant to which any Priority Lien Debt is incurred and
all other agreements governing, securing or relating to any Priority Lien
Obligations.
"Priority Lien Obligations" means the Priority Lien Debt and
all other Obligations in respect of Priority Lien Debt.
"Release" means any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment,
18
including the movement of Hazardous Material through or in the air, soil,
surface water, ground water or property.
"Required Parity Debtholders" means, at any time in respect of
any action or matter, holders of a majority in aggregate outstanding principal
amount of all Parity Lien Debt then outstanding, voting together as a single
class. For this purpose, Parity Lien Debt registered in the name of, or
beneficially owned by, the Company or any Affiliate of the Company will be
deemed not to be outstanding.
"Required Priority Debtholders" means, at any time in respect
of any action or matter, (1) holders of the outstanding principal amount of, or
commitments with respect to, the applicable Priority Lien Debt then outstanding
required pursuant to the terms of the applicable Credit Facility, voting as a
single class, to approve such action or matter or (2) the Priority Lien Agent
acting upon the authorization or consent of the holders referred to in the
immediately preceding clause (1). For this purpose, Priority Lien Debt
registered in the name of, or beneficially owned by, the Company or any
Affiliate of the Company will be deemed not to be outstanding.
"Responsible Officer," means, with respect to the Collateral
Trustee, any officer within the corporate trust department of the Collateral
Trustee including any vice president, assistant vice president, assistant
treasurer, trust officer or any other officer of the Collateral Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such Person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Agreement.
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group (or, if such
entity ceases to rate the applicable notes for reasons outside of the control of
the Company, the equivalent investment grade credit rating from any other
"nationally recognized statistical rating organization" (or successor concept)
within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act (or
successor provision) selected by the Company as a replacement agency).
"Sale of Designated Assets" means any Asset Sale involving a
sale or other disposition of Designated Assets.
"Secured Debt" means Parity Lien Debt and Priority Lien Debt.
"Secured Debt Default" means (i) the failure to pay any
Secured Debt at maturity or (ii) any event or condition which, under the terms
of any indenture or agreement governing any Series of Secured Debt causes, or
permits holders of Secured Debt outstanding thereunder (with or without the
giving of notice or lapse of time, or both, and whether or not notice has been
given or time has lapsed) to cause, the Secured Debt outstanding thereunder to
become immediately due and payable.
19
"Secured Debt Documents" means the Parity Lien Debt Documents
and the Priority Lien Documents.
"Secured Debtholder" means, at any time, a Person which then
is the holder of, or has any commitment with respect to, any Secured Debt.
"Secured Debt Representative" means each Parity Debt
Representative and the Priority Lien Agent.
"Secured Obligations" means the Parity Lien Obligations and
the Priority Lien Obligations.
"Security Documents" means this Agreement and one or more
security agreements, pledge agreements, collateral assignments, mortgages,
collateral agency agreements, deeds of trust or other grants or transfers for
security executed and delivered by the Company or any other Obligor creating (or
purporting to create) a Lien upon Collateral in favor of the Collateral Trustee
(including the Existing Security Documents, as assigned to the Collateral
Trustee), in each case, as amended, modified, renewed, restated or replaced, in
whole or in part, from time to time, in accordance with its terms.
"Series of Parity Lien Debt" means, severally, each of the
2007 Notes, the 2010 Notes, the 2013 Notes, the Term Loans and each other issue
or series of Parity Lien Debt for which a single transfer register is
maintained.
"Series of Secured Debt" means, severally, each of the 2007
Notes, the 2010 Notes, the 2013 Notes, the Term Loans, each other issue or
series of Parity Lien Debt for which a single transfer register is maintained
and each issue or series of Priority Lien Debt for which a single register is
maintained.
"Sharing Confirmation" means, as to any Series of Parity Lien
Debt, the written agreement of the holders of such Series of Parity Lien Debt,
as set forth in the indenture or agreement governing such Series of Parity Lien
Debt, for the enforceable benefit of all holders of each other existing and
future Series of Parity Lien Debt and each existing and future Parity Debt
Representative, that all Parity Lien Obligations shall be and are secured
equally and ratably by all Liens at any time granted by the Company or any other
Obligor to secure any Obligations in respect of such Series of Parity Lien Debt,
whether or not upon property otherwise constituting Collateral, that all such
Liens shall be enforceable by the Collateral Trustee for the benefit of all
holders of Parity Lien Obligations equally and ratably, and that the holders of
Obligations in respect of such Series of Parity Lien Debt are bound by the
provisions in this Agreement relating to the order of application of proceeds
from enforcement of the Collateral Trustee's Liens upon the Collateral, and
consent to and direct the Collateral Trustee to perform its obligations under
this Agreement.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which the
payment of interest or principal was scheduled to be paid in the documentation
governing such Indebtedness as of the date of the
20
indenture, and will not include any contingent obligations to repay, redeem or
repurchase any such interest or principal prior to the date originally scheduled
for the payment thereof.
"Subsidiary" means, as applied to any Person, any corporation,
limited or general partnership, trust, association or other business entity of
which an aggregate of at least 50% of the outstanding Voting Shares, or an
equivalent controlling interest therein, of such Person is, at the time,
directly or indirectly, owned by such Person and/or one or more Subsidiaries of
such Person.
"Term Loan Administrative Agent" means Goldman Sachs Credit
Partners L.P., as administrative agent under the Term Loan Agreement, together
with its successors in such capacity.
"Term Loan Agreement" means that certain Term Loan Agreement
dated the date hereof between the Company and the Term Loan Administrative
Agent, relating to $750.0 million in aggregate principal amount of Term Loans,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as amended, modified, increased,
renewed, restated or replaced, in whole or in part, from time to time.
"Term Loan Documents" means the Term Loan Agreement, each
Sharing Confirmation and the Security Documents.
"Term Loans" means the principal of and interest and premium
(if any) on Indebtedness of the Company incurred under the Term Loan Agreement.
"Unrestricted Subsidiary" means any Subsidiary of the Company
that is designated by the Board of Directors as an Unrestricted Subsidiary (and
any subsidiary of an Unrestricted Subsidiary) pursuant to a Board Resolution
passed after the date of each of the 2007 Indenture, the 2010 Indenture and the
2013 Indenture, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the
terms of any such agreement, contract, arrangement or understanding are
no less favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons who are not
Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
21
Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary
will be evidenced to the 2007 Trustee, the 2010 Trustee and the 2013 Trustee, as
applicable, by filing with the applicable trustee(s) a certified copy of the
Board Resolution giving effect to such designation and an officer's certificate
certifying that such designation complied with the preceding conditions and was
permitted by the covenant described under Section 4.07 of each of the 2007
Indenture, the 2010 Indenture and the 2013 Indenture. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of the 2007 Indenture, the 2010 Indenture and the 2013
Indenture, as the case may be, and any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
and, if such Indebtedness is not permitted to be incurred as of such date under
the covenant described under Section 4.09 of each of the 2007 Indenture, the
2010 Indenture and the 2013 Indenture, the Company will be in default of such
covenant. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such Indebtedness
is permitted under the covenant described under Section 4.09 of each of the 2007
Indenture, the 2010 Indenture and the 2013 Indenture calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation.
"Voting Stock" of any Person as of any date means the
Capital Stock of such Person that is at the time entitled to vote in the
election of the Board of Directors of such Person.
(b) All capitalized terms used in this Agreement that are
defined in Article 9 of the UCC, as in effect on the date of this Agreement in
the State of New York, and not otherwise defined herein shall have the meanings
therein set forth.
1.2. RULES OF INTERPRETATION.
(a) Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference.
(b) Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms.
(c) Unless otherwise indicated, any reference to any
agreement or instrument shall be deemed to include a reference to such agreement
or instrument as assigned, amended, amended and restated, supplemented,
otherwise modified from time to time or replaced in accordance with the terms of
this Agreement.
(d) The use in this Agreement or any of the other
Security Documents of the word "include" or "including," when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
22
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. The word "will" shall be construed to
have the same meaning and effect as the word "shall."
(e) References to "Sections" and "clauses" shall be to
Sections and clauses, respectively, of this Agreement unless otherwise
specifically provided.
(f) References to "Articles" shall be to Articles of this
Agreement unless otherwise specifically provided.
(g) References to "Exhibits" and "Schedules" shall be to
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided.
(h) The use in this Agreement of the words "herein,"
"hereof," and "hereunder," and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof.
(i) This Agreement, the other Security Documents and any
documents or instruments delivered pursuant hereto shall be construed without
regard to the identity of the party who drafted the various provisions of the
same. Each and every provision of this Agreement, the other Security Documents
and instruments and documents entered into and delivered in connection therewith
shall be construed as though the parties participated equally in the drafting of
the same. Consequently, each of the parties acknowledges and agrees that any
rule of construction that a document is to be construed against the drafting
party shall not be applicable either to this Agreement or the other Security
Documents and instruments and documents entered into and delivered in connection
therewith.
ARTICLE 2. THE TRUST ESTATE
2.1. DECLARATION OF TRUST.
To Secure the payment of the Secured Obligations and in
consideration of the premises and the mutual agreements set forth herein, each
of the Company and the Canadian Guarantors hereby grants to the Collateral
Trustee, and the Collateral Trustee hereby accepts and agrees to hold, in trust
under this Agreement for the benefit of all present and future holders of
Secured Obligations, all of the Collateral Trustee's right, title and interest
in, to and under the Existing Security Documents, as assigned to the Collateral
Trustee pursuant to Section 7.19, and all other Security Documents, including
all Guarantees thereunder, at any time delivered to the Collateral Trustee and
all interests, rights, powers and remedies of the Collateral Trustee thereunder
or in respect thereof and all cash and non-cash proceeds thereof (collectively,
the "Trust Estate"),
To Have and to Hold the Trust Estate unto the Collateral
Trustee and its successors and assigns in trust under this Agreement,
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In Trust, Nevertheless, for the benefit solely and exclusively
of all present and future holders of Secured Obligations as security for the
payment of all present and future Secured Obligations,
Provided, that if at any time (i) all Liens granted by, and
all Guarantees made under, any of the Security Documents have been released as
provided in Section 4.1, (ii) the Collateral Trustee holds no other property in
trust as part of the Trust Estate, (iii) no monetary obligation is outstanding
and payable under this Agreement to the Collateral Trustee or any of its
co-trustees, agents or sub-agents (whether in an individual or representative
capacity) and (iv) the Company delivers to the Collateral Trustee an Officer's
Certificate stating that all Liens of, and all Guarantees made in favor of, the
Collateral Trustee have been released in compliance with all applicable
provisions of the Secured Debt Documents and that the Company and the Canadian
Guarantors are not required by any Secured Debt Document to grant any Lien upon
any property to secure, or make any Guarantee to support, the Secured
Obligations, then the trust arising hereunder shall terminate, except that,
notwithstanding such termination, all provisions set forth in Sections 7.7 and
7.8 hereof enforceable by the Collateral Trustee or any of its co-trustees,
agents or sub-agents (whether in an individual or representative capacity) shall
remain enforceable in accordance with their terms,
And the Parties Further Declare and Covenant that the Trust
Estate shall be held and distributed by the Collateral Trustee subject to the
further agreements herein.
ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE
3.1. UNDERTAKING OF THE COLLATERAL TRUSTEE.
(a) Subject to, and in accordance with, this Agreement,
the Collateral Trustee will, as trustee for the benefit solely and exclusively
of the present and future holders of Secured Obligations:
(i) accept transfer of the Existing Security
Documents and receive, accept, enter into, hold, maintain, administer
and enforce all other Security Documents, including all Guarantees
thereunder, at any time delivered to it and all security interests
created thereunder, perform its obligations under the Security
Documents and protect, exercise and enforce the interests, rights,
powers and remedies granted or available to it under, pursuant to or in
connection with the Security Documents;
(ii) take all lawful and commercially reasonable
actions permitted under the Security Documents that it may deem
necessary or advisable to protect or preserve its interest in the
Collateral and any such Guarantees and such interests, rights, powers
and remedies;
(iii) deliver and receive notices pursuant to the
Security Documents;
(iv) sell, assign, collect, assemble, foreclose
on, institute legal proceedings with respect to, or otherwise exercise
or enforce the rights and remedies of a secured party (including a
mortgagee, trust deed beneficiary and insurance beneficiary or
24
loss payee) with respect to the Collateral and any such Guarantees and
its other interests, rights, powers and remedies;
(v) remit as provided in Section 3.4 all cash
proceeds received by the Collateral Trustee from the collection,
foreclosure or enforcement of its interest in the Collateral or any
such Guarantees or any of its other interests, rights, powers or
remedies;
(vi) execute and deliver amendments to the
Security Documents as from time to time authorized by an Act of Secured
Debtholders; and
(vii) release any Lien granted to it by any
Security Document upon any Collateral or release and terminate any
Guarantee granted to it by any Security Document, in each case if and
as required by Section 4.1(b).
(b) Each party to this Agreement acknowledges and consents to
the undertaking of the Collateral Trustee set forth in Section 3.1(a) and agrees
to each of the other provisions of this Agreement applicable to it.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Collateral Trustee shall not commence any exercise of remedies,
any foreclosure actions or otherwise take any action or proceeding against any
of the Collateral unless and until it shall have received a Notice of Actionable
Default or a Responsible Officer of the Collateral Trustee has actual knowledge
that an Actionable Default has occurred and is continuing and then only in
accordance with the provisions of this Agreement.
3.2. RELEASE OR SUBORDINATION OF LIENS. The Collateral Trustee will not
release or subordinate any Lien of the Collateral Trustee or consent to the
release or subordination of any Lien of the Collateral Trustee, except (a) as
directed by an Act of Secured Debtholders, (b) as required by Article 4 or (c)
as ordered pursuant to applicable law by a court of competent jurisdiction.
3.3. REMEDIES UPON ACTIONABLE DEFAULT. If the Collateral Trustee at any
time receives a Notice of Actionable Default or has actual knowledge that an
Actionable Default has occurred and is continuing, it will promptly deliver
written notice thereof to each Secured Debt Representative. Thereafter, the
Collateral Trustee may await direction by an Act of Instructing Debtholders and
will act, or decline to act, as directed by an Act of Instructing Debtholders,
in the exercise and enforcement of the Collateral Trustee's interests, rights,
powers and remedies in respect of the Collateral or under the Security Documents
or the Guarantees of the Canadian Guarantors or applicable law. Notwithstanding
the foregoing, at any time when a Priority Foreclosure Event is continuing, the
Collateral Trustee will act as directed in writing by the Required Priority
Debtholders to initiate the exercise of remedies in respect of the Collateral
and the Guarantees of the Canadian Guarantors and, following the initiation of
such exercise of remedies, the Collateral Trustee will act, or decline to act,
with respect to the manner of such exercise of remedies as directed by an Act of
Instructing Debtholders (provided that no Act of Instructing Debtholders shall
countermand the initiation of such exercise of remedies by the Required Priority
Debtholders). Unless it has been directed to the contrary by an Act of
Instructing Debtholders, the Collateral Trustee in any event may (but shall not
be obligated to)
25
take or refrain from taking such action with respect to any Actionable Default
as it may deem advisable and in the best interest of the holders of Secured
Obligations.
3.4. APPLICATION OF PROCEEDS. (a) The Collateral Trustee shall apply
the proceeds of any collection, sale, foreclosure or other realization upon any
Collateral, or any realization upon any Guarantee of the Canadian Guarantors, in
the following order of application (the "Order of Application"):
FIRST, to the payment of all amounts payable under this Agreement on account
of the Collateral Trustee's fees or any reasonable legal fees, costs and
expenses or other liabilities of any kind incurred by the collateral trustee or
any co-trustee or agent in connection with any Security Document;
SECOND, to the Priority Lien Agent for application to the payment of
Priority Lien Obligations in an amount not to exceed the Priority Lien Cap, or
to be held by the Priority Lien Agent pending such application, until all
Priority Lien Obligations have been paid in full in cash or the cash amount held
by the Priority Lien Agent in respect of all Priority Lien Obligations is
sufficient to pay all Priority Lien Obligations in full in cash;
THIRD, to the respective Parity Debt Representatives for application to the
Parity Lien Obligations equally and ratably until all Parity Lien Obligations
have been paid in full in cash; and
FOURTH, any surplus remaining after the payment in full in cash of all of
the Secured Obligations shall be paid to the Company or the applicable Canadian
Guarantor, as the case may be, its successors or assigns, or to whomsoever may
be lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct.
For this purpose, "proceeds" of Collateral or any Guarantee of
the Canadian Guarantors includes any and all cash, securities and other property
realized from collection, foreclosure or enforcement of the Collateral Trustee's
Liens upon the Collateral (including distributions of Collateral in satisfaction
of any Secured Obligations) or any Guarantee of the Canadian Guarantors made in
favor of the Collateral Trustee.
(b) If any Parity Debt Representative or any holder of a
Parity Lien Obligation collects or receives any proceeds in respect of the
Parity Lien Obligations that should have been applied to the payment of the
Priority Lien Obligations in accordance with clause (a) above, whether after the
commencement of a Bankruptcy Case or otherwise, such Parity Debt Representative
or such holder of a Parity Lien Obligation, as the case may be, will forthwith
deliver the same to the Priority Lien Agent, for the account of the holders of
the Priority Lien Obligations, in the form received, duly indorsed to the
Priority Lien Agent, for the account of the holders of the Priority Lien
Obligations, if required, to be applied in accordance with clause (a) above.
Until so delivered, such proceeds will be held by such Parity Debt
Representative or such holder of a Parity Lien Obligation, as the case may be,
for the benefit of the holders of the Priority Lien Obligations and shall be
deemed to be held segregated from other funds and property held by such Parity
Debt Representative or such holder of a Parity Lien Obligation.
26
3.5. POWERS OF THE COLLATERAL TRUSTEE.
(a) The Collateral Trustee is irrevocably authorized and
empowered to enter into and perform its obligations and protect, perfect,
exercise and enforce its interest, rights, powers and remedies under the
Security Documents, including any Guarantees thereunder, and applicable law and
to act as set forth in this Article 3 or as requested in any lawful directions
given to it from time to time in respect of any matter by an Act of Secured
Debtholders.
(b) Subject to Article 4 and Section 3.3, the Collateral
Trustee shall take direction only pursuant to an Act of Secured Debtholders.
(c) Each Secured Debt Representative has, and each future
Secured Debt Representative will, become party to this Agreement, solely to
confirm consent to the undertaking of the Collateral Trustee set forth in
Sections 2.1 and 3.1(a) and its acceptance of the rights granted to it by this
Agreement. No Secured Debt Representative, Secured Debtholder or other holder of
Secured Obligations shall have (i) any obligation or liability under or in
respect of this Agreement or any Act of Secured Debtholders to which it is not a
signatory party; (ii) any responsibility or duty whatsoever in respect of the
Collateral or Security Documents, including any Guarantee thereunder, or any
other interest, right, power or remedy granted to or enforceable by the
Collateral Trustee, it being understood and agreed by the Collateral Trustee and
by the Company and the Canadian Guarantors that only the Collateral Trustee
shall be bound by the obligations of the Collateral Trustee expressly set forth
in the Security Documents to which the Collateral Trustee is a party or (iii)
any liability whatsoever for any act or omission of the Collateral Trustee.
3.6. DOCUMENTS AND COMMUNICATIONS. The Collateral Trustee will permit
each Secured Debt Representative and each Secured Debtholder upon reasonable
written notice or from time to time to inspect and copy any and all Security
Documents and other documents, notices, certificates, instructions or
communications received by the Collateral Trustee in its capacity as such.
3.7. FOR SOLE AND EXCLUSIVE BENEFIT OF HOLDERS OF SECURED OBLIGATIONS.
The Collateral Trustee shall accept, hold, administer and
enforce all Liens at any time transferred or delivered to it and all other
interests, rights, powers and remedies at any time granted to or enforceable by
the Collateral Trustee and all other property of the Trust Estate solely and
exclusively for the benefit of the present and future holders of present and
future Secured Obligations, and shall distribute all cash proceeds received by
it in realization thereon or from enforcement thereof solely and exclusively to
the Secured Debt Representatives for the benefit of the Secured Debtholders and
to the Company pursuant to the provisions of Section 3.4.
3.8. ADDITIONAL SECURED DEBT.
(a) The Collateral Trustee will, as trustee hereunder, perform
its undertakings set forth in Section 3.1(a) with respect to each future holder
of Secured Obligations that (i) is identified as a holder of Parity Lien Debt or
Priority Lien Debt in accordance with the procedures set forth in Section 3.8(b)
and (ii) signs, through its designated Secured Debt Representative identified
pursuant to Section 3.8(b), a Collateral Trust Joinder.
27
(b) The Company shall be permitted to designate as additional
Secured Debtholders hereunder each person who is, or who becomes, the registered
holder of Parity Lien Debt or the holder of Priority Lien Debt incurred by the
Company after the date of this Agreement. The Company may effect such
designation by delivering to the Collateral Trustee, with copies to each
previously identified Secured Debt Representative, each of the following:
(i) An Officer's Certificate stating that:
(A) The Company intends to incur additional
Secured Debt ("New Secured Debt") which shall either
be (x) Priority Lien Debt permitted by each indenture or agreement governing
Secured Debt to be secured with a Priority Lien on a pari passu basis with all
previously existing Priority Lien Debt and which, when the principal amount
thereof is added to the principal amount of all previously existing Priority
Lien Debt, shall be in an aggregate principal amount that is permitted by the
terms of the Secured Debt Documents or (y) Parity Lien Debt permitted by each
indenture or agreement governing Secured Debt to be secured with a Parity Lien
on a pari passu basis with all previously existing Parity Lien Debt and which,
when incurred and after giving pro forma effect to the incurrence of such Parity
Lien Debt and the application of the proceeds therefrom, shall be in an amount
that is permitted by the terms of each Secured Debt Document;
(B) After giving pro forma effect to the
incurrence of such New Secured Debt and the application of the proceeds
therefrom no Secured Debt Default shall have occurred and be continuing and, to
the best of the signatory's knowledge after due inquiry, no event or condition
shall have occurred which could reasonably be expected to result in a Secured
Debt Default;
(C) If the incurrence of such New Secured
Debt provides, pursuant to the indenture or agreement governing such New Secured
Debt, that additional Collateral shall be required as security therefor, the
Company has duly authorized, executed and filed or recorded, as applicable, in
each appropriate governmental office financing statements and/or mortgages, as
applicable, creating in favor of the Collateral Trustee, in its capacity as
trustee hereunder, a valid and perfected first priority Lien on such additional
Collateral, subject to the provisions of Section 3.4 and any Permitted Prior
Liens; and
(D) The Company has duly authorized,
executed and recorded in each appropriate governmental office a Notice of
Advance declaring that the New Secured Debt is secured by the Collateral;
(ii) an Opinion of Company Counsel stating that the
Officer's Certificate delivered pursuant to clause (i) above has been duly
authorized by the Board of Directors of the Company and has been duly executed
and delivered; and
(iii) a written notice specifying the name and
address of the Secured Debt Representative for such series of New Secured Debt
for purposes of Section 7.5.
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ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE COMPANY AND THE CANADIAN GUARANTORS
4.1. RELEASE OF LIENS.
(a) The Collateral Trustee's Liens upon the Collateral will be
released pursuant to Section 4.1(b) below:
(1) in whole, upon (A) payment in full and discharge of all outstanding
Secured Debt and all other Secured Obligations that are outstanding, due and
payable at the time all of the Secured Debt is paid in full and discharged
and (B) termination or expiration of all commitments to extend credit under
all Credit Facilities the Indebtedness under which constitutes or would
constitute Priority Lien Debt;
(2) as to any Collateral, if consent to the release of such Collateral
has been given by an Act of Secured Debtholders or, if such Collateral
represents all or substantially all of the Collateral, consent to release of
such Collateral has been given by the requisite percentage or number of
holders of each Series of Secured Debt under the applicable Secured Debt
Document and, in each case such release has become effective in accordance
with such consent;
(3) as to (i) any Collateral that is sold, transferred or otherwise
disposed of or (ii) in the case where the release is to be granted in
advance of any sales, transfers or other dispositions, any Collateral to be
sold, transferred or otherwise disposed of, by the Company or any Canadian
Guarantor in a transaction or other circumstance not prohibited by any of
the Secured Debt Documents, at the time of such sale, transfer or other
disposition or, in the case of any Collateral to be sold, transferred or
otherwise disposed of, at the time specified for such release, to the extent
of the interest sold, transferred or otherwise disposed of, or to be sold,
transferred or otherwise disposed of; provided that, in the case where the
release is to be granted in advance of any sales, transfers or other
disposition, (x) such release will only become effective if such Collateral
has a Fair Market Value of $5 million or less and the Fair Market Value of
such Collateral, together with all other Collateral that has been subject to
a release described in this proviso, does not exceed $25 million during any
period of 12 consecutive months, (y) no Lien has or will be granted to any
Person other than the Collateral Trustee in respect of such Collateral
during the period between such release and the consummation of the sale,
transfer or other disposition of such Collateral and (z) in the event that
the consummation of the sale, transfer or other disposition of such
Collateral does not take place (or a definitive binding agreement with
respect to such sale, transfer or other disposition is not entered into)
within 60 days of such release, the Lien of the Collateral Trustee will
immediately and automatically be reinstated on such Collateral;
(4) as to any Collateral consisting of a Pledged Power Project, if the
Company's interest in such Pledged Power Project is transferred to a
Restricted Subsidiary of the Company in a transaction not prohibited by any
of the Secured Debt Documents;
(5) as to any Collateral in connection with any abandonment, forfeiture,
surrender or release of oil and gas assets, or a lease termination, not
prohibited by any of the Secured Debt
29
Documents; and
(6) as to any Excluded Assets upon request of the Company.
In addition, in the case of a release of all Collateral owned
by any Canadian Guarantor pursuant to the foregoing provisions, the Guarantee of
such Canadian Guarantor will also be automatically released pursuant to the
Security Documents.
(b) The Collateral Trustee agrees for the benefit of the
Company and the Canadian Guarantors that if the Collateral Trustee at any time
receives:
(i) An Officer's Certificate stating that:
(A) (x) such officer has read Article 4 of
this Agreement and understands the provisions and the
definitions relating hereto, (y) such officer has made such
examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not the
conditions precedent in this Agreement, if any, relating to
the release of the Collateral have been complied with and (z)
in the opinion of such officer, such conditions precedent, if
any, have been complied with;
(B) no Secured Debt Default shall have
occurred or is continuing and, to the best of the signatory's
knowledge after due inquiry, no event or condition shall have
occurred which could reasonably be expected to result in a
Secured Debt Default or will result from the release of such
Lien and/or Guarantee, as applicable; and
(C) for releases effected after the date of
this Agreement, as to any release of oil and gas assets
permitted pursuant to clause (3) or (5) of Section 4.1(a),
that such release shall not adversely affect or impair the
Lien of a Security Document with respect to any other portion
of the Collateral;
(ii) The proposed instrument or instruments releasing
such Lien as to such property and/or Guarantee, as applicable, in recordable
form, if applicable;
(iii) an Opinion of Company Counsel to the effect
that:
(A) the conditions precedent, if any, in
Section 4.1 of this Agreement to be satisfied with respect to
the release of such Collateral have been complied with; and
(B) with respect to all releases, that the
instrument or instruments proposed to be executed will be
effective solely to release the Lien of the Security Document
as to the property described in such Officer's Certificate
and/or the Guaranty described in such Officer's Certificate,
as applicable (without requiring the Collateral Trustee to
make any representation or warranty in respect thereof),
without releasing or satisfying any obligation secured by such
Lien
30
and/or guaranteed by such Guarantee, as applicable, and
without imposing any obligation or liability upon the
Collateral Trustee or any other Person;
(iv) for releases effected after the date of this
Agreement, the written confirmation of the Credit Agreement
Agent and, for so long as the Term Loans shall be outstanding,
the Term Loan Administrative Agent that, in its view, such
release is permitted by Section 4.1(a); provided that each of
the Credit Agreement Agent and the Term Loan Administrative
Agent agree that as soon as practicable after receipt of any
Officer's Certificate from the Company pursuant to Section 4.2
it will either provide (x) such written confirmation, (y) a
written statement that such release is not permitted by
Section 4.1(a) or (z) a request for further information
regarding the proposed release from the Company;
then the Collateral Trustee will execute (with such acknowledgements and/or
notarizations as are required) and deliver such release to the Company on or
before the later of (x) the date specified in such request for such release and
(y) the fifth Business Day after the date of receipt of the items required by
Section 4.1(b) by the Collateral Trustee.
In the case of any release pursuant to clause (2) or (3) of Section
4.1(a), if the terms of any such sale, transfer or other disposition require the
payment of the purchase price to be contemporaneous with the delivery of the
applicable release, then, at the request of the Company, the Collateral Trustee
shall either be present at the closing of such transaction or shall deliver the
release under customary escrow arrangements that permit such contemporaneous
payment and delivery of the release.
4.2. DELIVERY OF COPIES TO SECURED DEBT REPRESENTATIVES. The Company
will deliver to each Secured Debt Representative a copy of each Officer's
Certificate delivered to the Collateral Trustee pursuant to Section 4.1,
together with copies of all documents delivered to the Collateral Trustee with
such Officer's Certificate. The Secured Debt Representatives will not be
obligated to take notice thereof or to act thereon, subject to Section
4.1(b)(iv).
4.3. COLLATERAL TRUSTEE NOT REQUIRED TO SERVE, FILE OR RECORD. The
Collateral Trustee is not required to serve, file, register or record any
instrument releasing or subordinating its security interest in any Collateral.
ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE.
5.1. NO IMPLIED DUTY. The Collateral Trustee will not have any duties
or responsibilities except those expressly assumed by it in this Agreement and
the other Security Documents and shall not be required to take any action which
is contrary to applicable law or any provision of this Agreement or the other
Security Documents.
5.2. APPOINTMENT OF AGENTS AND ADVISORS. The Collateral Trustee may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or thorough agents, attorneys, accountants, appraisers or
other experts or advisors as it may reasonably require and shall not be
responsible for any misconduct or negligence on the part of any of them.
31
5.3. OTHER AGREEMENTS. The Collateral Trustee has accepted and is bound
by the Security Documents executed by the Collateral Trustee as of the date of
this Agreement and, subject to Article 4 and, as directed by an Act of Secured
Debtholders, the Collateral Trustee may execute additional Security Documents
delivered to it after the date of this Agreement, provided, however, that such
additional Security Documents do not adversely affect the rights, privileges,
benefits and immunities of the Collateral Trustee. The Collateral Trustee shall
not otherwise be bound by, or be held obligated by, the provisions of any
indenture or agreement governing Secured Debt.
5.4. SOLICITATION OF INSTRUCTIONS.
(a) The Collateral Trustee may at any time solicit
confirmatory instructions, in the form of an Act of Secured Debtholders or an
order of a court of competent jurisdiction, as to any action which it may be
requested or required to take, or which it may propose to take, in the
performance of any of its obligations under this Agreement.
(b) No direction given to the Collateral Trustee by an Act of
Secured Debtholders which imposes, purports to impose or might reasonably be
expected to impose upon the Collateral Trustee any obligation or liability not
set forth in or arising under this Agreement and the other Security Documents
accepted by the Collateral Trustee shall be binding upon the Collateral Trustee
unless the Collateral Trustee elects, at its sole option, to accept such
direction.
5.5. LIMITATION OF LIABILITY. The Collateral Trustee shall not be
responsible or liable for any action taken or omitted to be taken by it
hereunder or under any other Security Document, except for its own gross
negligence or willful misconduct.
5.6. DOCUMENTS IN SATISFACTORY FORM. The Collateral Trustee shall be
entitled to require that all agreements, certificates, opinions, instruments and
other documents at any time submitted to it, including those expressly provided
for in this Agreement, be delivered to it in a form and upon substantive
provisions reasonably satisfactory to it.
5.7. ENTITLED TO RELY. The Collateral Trustee may conclusively rely
upon any certificate, notice or other document (including any teletransmission)
reasonably believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons and need not investigate
any fact or matter stated in any such document. The Collateral Trustee may seek
and rely upon any judicial order or judgment, upon any advice, opinion or
statement of legal counsel, independent consultants and other experts selected
by it in good faith and upon any certification, instruction, notice or other
writing delivered to it by the Company in compliance with the provisions of this
Agreement or delivered to it by any Secured Debt Representative as to the
Secured Debtholders for whom it acts, without being required to determine the
authenticity thereof or the correctness of any fact stated therein or the
propriety or validity of service thereof. The Collateral Trustee may act in
reliance upon any instrument comporting with the provisions of this Agreement or
any signature reasonably believed by it to be genuine and may assume that any
Person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so. To the extent an Officer's Certificate or an Opinion of
Company Counsel is required or permitted under this Agreement to be delivered to
the Collateral Trustee
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in respect of any matter, the Collateral Trustee may rely conclusively on such
Officer's Certificate or Opinion of Company Counsel as to such matter.
5.8. SECURED DEBT DEFAULT. The Collateral Trustee shall not be required
to inquire as to the occurrence or absence of any Secured Debt Default and shall
not be affected by or required to act upon any notice or knowledge as to the
occurrence of any Secured Debt Default unless and until it receives a Notice of
an Actionable Default or a Responsible Officer of the Collateral Trustee has
actual knowledge that an Actionable Default has occurred and is continuing.
5.9. ACTIONS BY COLLATERAL TRUSTEE. As to any matter not expressly
provided for by this Agreement, the Collateral Trustee shall act or refrain from
acting as directed by Act of Secured Debtholders and shall be fully protected if
it does so.
5.10. SECURITY OR INDEMNITY IN FAVOR OF THE COLLATERAL TRUSTEE. The
Collateral Trustee shall not be required to advance or expend any funds or
otherwise incur any financial liability in the performance of its duties or the
exercise of its powers or rights hereunder unless it has been provided with
security or indemnity reasonably satisfactory to it against any and all
liability or expense which may be incurred by it by reason of taking or
continuing to take such action.
5.11. RIGHTS OF THE COLLATERAL TRUSTEE.(a) Notwithstanding anything to
the contrary contained herein or in any of the other Security Documents, the
Collateral Trustee shall be under no obligation to take any action which in its
sole discretion, would subject the Collateral Trustee to personal or financial
liability.
(b) In the event there is any disagreement between the other
parties to this Agreement or any of the other Security Documents resulting in
adverse claims being made in connection with Collateral held by the Collateral
Trustee and the terms of this Agreement or any of the other Security Documents
do not unambiguously mandate the action the Collateral Trustee is to take or not
to take in connection therewith under the circumstances then existing, or the
Collateral Trustee is in doubt as to what action it is required to take or not
to take, it shall be entitled to refrain from taking any action until directed
otherwise in writing by a request signed jointly by the parties hereto entitled
to give such direction or by order of a court of competent jurisdiction.
5.12. LIMITATIONS ON DUTY OF COLLATERAL TRUSTEE IN RESPECT OF
COLLATERAL.
(a) Beyond the exercise of reasonable care in the custody
thereof, the Collateral Trustee shall have no duty as to any Collateral in its
possession or control or in the possession or control of any agent or bailee or
any income thereon or as to preservation of rights against prior parties or any
other rights pertaining thereto and the Collateral Trustee shall not be
responsible for filing any financing or continuation statements or recording any
documents or instruments in any public office at any time or times or otherwise
perfecting or maintaining the perfection of any security interest in the
Collateral. The Collateral Trustee shall be deemed to have exercised reasonable
care in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords its own property
and shall not be liable or responsible for any loss or diminution in the value
of any of the Collateral, by reason of the act
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or omission of any carrier, forwarding agency or other agent or bailee selected
by the Collateral Trustee in good faith.
(b) The Collateral Trustee shall not be
responsible for the existence, genuineness or value of any of the Collateral or
for the validity, perfection, priority or enforceability of the Liens in any of
the Collateral, whether impaired by operation of law or by reason of any action
or omission to act on its part hereunder, except to the extent such action or
omission constitutes gross negligence, bad faith or willful misconduct on the
part of the Collateral Trustee, for the validity or sufficiency of the
Collateral or any agreement or assignment contained therein, for the validity of
the title of the Company to the Collateral, for insuring the Collateral or for
the payment of taxes, charges, assessments or Liens upon the Collateral or
otherwise as to the maintenance of the Collateral. The Collateral Trustee hereby
disclaims any representation or warranty to the present and future holders of
the Secured Obligations concerning the perfection of the Liens and security
interests granted hereunder or in the value of any of the Collateral.
5.13. ASSUMPTION OF RIGHTS, NOT ASSUMPTION OF DUTIES. Anything herein
contained to the contrary notwithstanding, (a) each of the parties thereto shall
remain liable under each of the Security Documents to the extent set forth
therein to perform all of their respective duties and obligations thereunder to
the same extent as if this Agreement had not be executed, (b) the exercise by
the Collateral Trustee of any of its rights, remedies or powers hereunder shall
not release such parties from any of their respective duties or obligations
under the Security Documents and (c) the Collateral Trustee shall not be
obligated to perform any of the obligations or duties of any of the parties
thereunder.
5.14. NO LIABILITY FOR CLEAN UP OF HAZARDOUS MATERIALS. In the event
that the Collateral Trustee is required to acquire title to an asset for any
reason, or take any managerial action of any kind in regard thereto, in order to
carry out any fiduciary or trust obligation for the benefit of another, which in
the Collateral Trustee's sole discretion may cause the Collateral Trustee to be
considered an "owner or operator" under the provisions of the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C.
ss.9601, et seq., or otherwise cause the Collateral Trustee to incur liability
under CERCLA or any other federal, state or local law, the Collateral Trustee
reserves the right to, instead of taking such action, either resign as
Collateral Trustee or arrange for the transfer of the title or control of the
asset to a court appointed receiver. The Collateral Trustee shall not be liable
to any person for any environmental claims or contribution actions under any
federal, state or local law, rule or regulation by reason of the Collateral
Trustee's actions and conduct as authorized, empowered and directed hereunder or
relating to the discharge, release or threatened release of hazardous materials
into the environment.
ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE.
6.1. RESIGNATION OR REMOVAL OF COLLATERAL TRUSTEE. Subject to the
appointment of a successor Collateral Trustee as provided in Section 6.2 and the
acceptance of such appointment by the successor Collateral Trustee, (a) the
Collateral Trustee may resign at any time by giving not less than 30 days'
notice of resignation to each Secured Debt Representative and the
34
Company and (b) the Collateral Trustee may be removed at any time, with or
without cause, by an Act of Secured Debtholders.
6.2. APPOINTMENT OF SUCCESSOR COLLATERAL TRUSTEE. Upon any such
resignation or removal, a successor Collateral Trustee may be appointed by the
Secured Debt Representatives, acting jointly, or by an Act of Secured
Debtholders. If no successor Collateral Trustee shall have been so appointed and
shall have accepted such appointment within 30 days after the predecessor
Collateral Trustee gave notice of resignation or was removed, the retiring
Collateral Trustee may (at the expense of the Company), at its option, appoint a
successor Collateral Trustee, or petition a court of competent jurisdiction for
appointment of a successor Collateral Trustee, which shall be a bank or trust
company (a) authorized to exercise corporate trust powers, (b) having a combined
capital and surplus of at least $50,000,000 and (c) maintaining an office in New
York, New York. The Collateral Trustee shall fulfill its obligations hereunder
until a successor Collateral Trustee meeting the requirements of this Section
6.2 has accepted its appointment as Collateral Trustee and the provisions of
Section 6.3 have been satisfied.
6.3. SUCCESSION. When the Person so appointed as successor Collateral
Trustee accepts such appointment:
(i) such Person shall succeed to and become vested with all
the rights, powers, privileges and duties of the predecessor Collateral Trustee,
and the predecessor Collateral Trustee shall be discharged from its duties and
obligations hereunder, and
(ii) the predecessor Collateral Trustee shall promptly
transfer all Liens and collateral security and other property of the Trust
Estate within its possession or control to the possession or control of the
successor Collateral Trustee and shall execute instruments and assignments as
may be necessary or desirable or reasonably requested by the successor
Collateral Trustee to transfer to the successor Collateral Trustee all Liens,
interests, rights, powers and remedies of the predecessor Collateral Trustee in
respect of the Security Documents or the Trust Estate.
Thereafter the predecessor Collateral Trustee shall remain entitled to enforce
the immunities granted to it in Article 5 and the provisions of Sections 7.7 and
7.8.
6.4. LIMITATION. The Collateral Trustee shall not be the same Person
as, or an Affiliate of, any Secured Debt Representative. If the Collateral
Trustee at any time becomes an Affiliate of any Secured Debt Representative, it
shall promptly resign subject to appointment of a successor Collateral Trustee
and acceptance of such appointment as provided in this Article 6.
ARTICLE 7. MISCELLANEOUS PROVISIONS.
7.1. AMENDMENT.
No amendment or supplement to the provisions of this Agreement or any
other Security Document (to which the Collateral Trustee is a party) will be
effective without the approval of the Collateral Trustee acting as directed by
an Act of Secured Debtholders and, in the case of this Agreement, the signature
of each other party to this Agreement, except that:
35
(1) any amendment or supplement that has the effect solely of adding or
maintaining Collateral, securing additional Secured Debt that was otherwise
permitted by the terms of the Secured Debt Documents to be secured by the
Collateral or preserving or perfecting the Liens thereon or the rights of
the Collateral Trustee therein, or adding or maintaining any Guarantee, will
become effective when executed and delivered by the Company or any other
Obligor party thereto and the Collateral Trustee as directed by the Company
or such other Obligor;
(2) no amendment or supplement that reduces, impairs or adversely
affects the right of any Secured Debtholder (A) to vote its outstanding
Secured Debt as to any matter described as subject to an Act of Secured
Debtholders, an Act of Instructing Debtholders, an act of the Required
Priority Debtholders or an act of the Required Parity Debtholders (or amends
the provisions of this clause (2) or the definition of "Act of Secured
Debtholders," "Act of Instructing Debtholders," "Required Priority
Debtholders," "Required Parity Debtholders," "Priority Foreclosure Event" or
"Actionable Default"), (B) to share in the order of application described in
Section 3.4 in the proceeds of enforcement of or realization on any
Collateral or any Guarantee of the Canadian Guarantors, in each case that
has not been released in accordance with the provisions described in Section
4.1 or (C) to require that Liens securing Secured Obligations be released
only as set forth in the provisions described in Section 4.1 will become
effective without the additional consent of such holder; and
(3) no amendment or supplement that imposes any obligation upon the
Collateral Trustee or any Secured Debt Representative or adversely affects
the rights of the Collateral Trustee or any Secured Debt Representative,
respectively, in its individual capacity will become effective without the
consent of the Collateral Trustee or such Secured Debt Representative,
respectively.
The Collateral Trustee shall not enter into any such amendment or
supplement unless it shall have received an Officer's Certificate to the
effect that such amendment or supplement will not result in a breach of any
provision or covenant contained in any of the Secured Debt Documents. Prior
to executing any amendment or supplement pursuant to this Section 7.1, the
Collateral Trustee shall be entitled to receive an Opinion of Company
Counsel to the effect that the execution of such document is authorized or
permitted hereunder, and with respect to amendments adding Collateral, an
Opinion of Company Counsel addressing customary perfection matters with
respect to such additional Collateral.
Any amendment or supplement to the provisions of the Security
Documents that releases Collateral or any Guarantee of the Canadian Guarantors
will be effective only in accordance with the requirements set forth in Section
4.1.
7.2. FURTHER ASSURANCES.
The Company and each of the Canadian Guarantors will do or cause to be
done all acts and things which may be required, or which the Collateral Trustee
from time to time may reasonably request, to assure and confirm that the
Collateral Trustee holds, for the benefit of the holders of Secured Obligations,
duly created, enforceable and perfected Liens upon the Collateral, including
after-acquired Collateral, subject, in the case of Parity Lien Obligations,
36
only to Priority Liens securing Priority Lien Obligations up to the Priority
Lien Cap and other Permitted Prior Liens, and duly created and enforceable
Guarantees of the Canadian Guarantors, in each case as contemplated by the
Secured Debt Documents.
The Company and each of the Canadian Guarantors will promptly
execute, acknowledge and deliver such security documents, instruments,
certificates, notices and other documents, and take such other actions as shall
be reasonably required, or which the Collateral Trustee may reasonably request,
to create, perfect, protect, assure or enforce the Liens and benefits intended
to be conferred, and to create, protect, assure or enforce the Guarantees of the
Canadian Guarantors, in each case as contemplated by the Secured Debt Documents
for the benefit of the holders of Secured Obligations. Upon the filing of
continuation statements (which is expected to be five years from the date hereof
and in five year intervals thereafter), the Company shall promptly deliver to
the Collateral Trustee an Opinion of Company Counsel reasonably satisfactory to
the Collateral Trustee as to the continued perfection of the Liens and security
interests created by the Security documents under the Uniform Commercial Code of
the State of New York.
7.3. SUCCESSORS AND ASSIGNS.
(a) Except as provided in Section 5.2, the Person acting as
Collateral Trustee may not, in its individual capacity, delegate any of its
duties or assign any of its rights hereunder, and any attempted delegation or
assignment of any such duties or rights shall be void. All obligations of the
Collateral Trustee hereunder shall inure to the sole and exclusive benefit of,
and be enforceable by, each Secured Debt Representative and each present and
future holder of Secured Obligations, each of whom shall be entitled to enforce
this Agreement as a third party beneficiary hereof, and all of their respective
successors and assigns.
(b) Neither the Company nor any of the Canadian Guarantors may
delegate any of its duties or assign any of its rights hereunder, and any
attempted delegation or assignment of any such duties or rights shall be void.
All obligations of the Company and the Canadian Guarantors hereunder shall inure
to the sole and exclusive benefit of, and be enforceable by, the Collateral
Trustee, each Secured Debt Representative and each present and future holder of
Secured Obligations, each of whom shall be entitled to enforce this Agreement as
a third party beneficiary hereof, and all of their respective successors and
assigns.
7.4. DELAY AND WAIVER. No failure to exercise, no course of dealing
with respect to the exercise of, and no delay in exercising, any right, power or
remedy arising under this Agreement or any of the other Security Documents shall
impair any such right, power or remedy or operate as a waiver thereof. No single
or partial exercise of any such right, power or remedy shall preclude any other
or future exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
7.5. NOTICES. Any communications, including notices and instructions,
between the parties hereto or notices provided herein to be given may be given
to the following addresses:
37
If to the Collateral Trustee: The Bank of New York
101 Barclay Street
Floor 8 West
New York, NY 10286
Attention: Corporate Trust
Administration
If to the Company or any Canadian
Guarantor: Calpine Corporation
50 West San Fernando Street
San Jose, CA 95113
Attention: General Counsel
If to the Credit Agreement Agent: Scotia Capital
One Liberty Plaza
New York, NY 10006
Attention: Denis P. O'Meara
With a copy to:
The Bank of Nova Scotia
600 Peachtree Street N.E.
Suite 2700
Atlanta, GA 30308
Attention: Hilma Gabbidon
If to the 2007 Trustee: Wilmington Trust Company
520 Madison Avenue, 33rd Floor
New York, NY 10022
Attention: James McGinley
If to the 2010 Trustee: Wilmington Trust Company
520 Madison Avenue, 33rd Floor
New York, NY 10022
Attention: James McGinley
If to the 2013 Trustee: Wilmington Trust Company
520 Madison Avenue, 33rd Floor
New York, NY 10022
Attention: James McGinley
38
If to the Term Loan Administrative Agent: Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, NY 10004
Attention: Pedro Ramirez
and if to any other Secured Debt Representative, to such
address as it may specify by written notice to the parties named above.
Each notice hereunder shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service and signed for against receipt thereof, upon receipt of
telefacsimile or telex, or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed. Each party may change
its address for notice hereunder to any other location within the continental
United States by giving written notice thereof to the other parties as set forth
in this Section 7.5.
7.6. ENTIRE AGREEMENT. This Agreement states the complete agreement of
the parties relating to the undertaking of the Collateral Trustee set forth
herein and supersedes all oral negotiations and prior writings in respect of
such undertaking.
7.7. COMPENSATION; EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, the Company agrees to pay, promptly
upon demand:
(i) such compensation to the Collateral Trustee and its
agents, co-agents and sub-agents as the Company and the Collateral
Trustee shall agree in writing from time to time;
(ii) all reasonable costs and expenses incurred in the
preparation, execution, delivery, filing, recordation, administration
or enforcement of this Agreement or any other Security Document or any
consent, amendment, waiver or other modification relating thereto;
(iii) all reasonable fees, expenses and disbursements of
legal counsel and any auditors, accountants, consultants or appraisers
or other professional advisors and agents engaged by the Collateral
Trustee or any Secured Debt Representative incurred in connection with
the negotiation, preparation, closing, administration, performance or
enforcement of this Agreement and the other Security Documents or any
consent, amendment, waiver or other modification relating thereto and
any other document or matter requested by the Company;
(iv) all reasonable costs and expenses of creating,
perfecting, releasing or enforcing the Collateral Trustee's security
interests in the Collateral, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums;
(v) all other reasonable costs and expenses incurred by
the Collateral Trustee or any Secured Debt Representative in connection
with the negotiation,
39
preparation and execution of the Security Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby or the exercise of rights or performance of
obligations by the Collateral Trustee thereunder; and
(vi) after the occurrence of any Secured Debt Default, all
reasonable costs and expenses incurred by the Collateral Trustee or any
Secured Debt Representative in connection with the preservation,
collection, foreclosure or enforcement of the Security Documents or any
interest, right, power or remedy of the Collateral Trustee or in
connection with the collection or enforcement of any of the Secured
Obligations or the proof, protection, administration or resolution of
any claim based upon the Secured Obligations in any Bankruptcy Case or
Insolvency Proceeding, including all reasonable fees and disbursements
of attorneys, accountants, auditors, consultants, appraisers and other
professionals engaged by the Collateral Trustee or the Secured Debt
Representatives.
The agreements in this Section 7.7 shall survive repayment of all other Secured
Obligations and the removal or resignation of the Collateral Trustee.
7.8. INDEMNITY.
(a) Each of the Company and the Canadian Guarantors jointly
and severally agrees to defend (subject to Indemnitees' selection of counsel; it
being understood that the holders of Priority Lien Debt and the holders of all
Parity Lien Debt shall each be entitled to select a single transaction counsel
and local counsel), indemnify, pay and hold harmless, the Collateral Trustee,
each Secured Debt Representative, each Secured Debtholder and each of their
respective Affiliates and each and all of the directors, officers, partners,
trustees, employees, attorneys and agents, and (in each case) their respective
heirs, representatives, successors and assigns (each of the foregoing, an
"Indemnitee") from and against any and all Indemnified Liabilities; provided, no
Indemnitee shall be entitled to indemnification hereunder with respect to any
Indemnified Liability to the extent such Indemnified Liability is found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(b) All amounts due under Section 7.8(a) shall be payable upon
demand.
(c) To the extent that the undertakings to defend, indemnify,
pay and hold harmless set forth in Section 7.8(a) may be unenforceable in whole
or in part because they are violative of any law or public policy, the Company
and the Canadian Guarantors shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(d) Neither the Company nor any Canadian Guarantor shall ever
assert any claim against any Indemnitee, on any theory of liability, for any
lost profits or special, indirect or consequential damages or (to the fullest
extent a claim for punitive damages may lawfully be waived) any punitive damages
arising out of, in connection with, or as a result of, this Agreement or any
other Secured Debt Document or any agreement or instrument or transaction
contemplated hereby or relating in any respect to any Indemnified Liability, and
each of the
40
Company and the Canadian Guarantors hereby forever waives, releases and agrees
not to sue upon any claim for any such lost profits or special, indirect,
consequential or (to the fullest extent lawful) punitive damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
(e) The agreements in this Section 7.8 shall survive repayment
of all other Secured Obligations and the removal or resignation of the
Collateral Trustee.
7.9. SEVERABILITY. If any provision of this Agreement is invalid,
illegal or unenforceable in any respect or in any jurisdiction, the validity,
legality and enforceability of such provision in all other respects and of all
remaining provisions, and of such provision in all other jurisdictions, shall
not in any way be affected or impaired thereby.
7.10. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
7.11. OBLIGATIONS SECURED. All obligations of the Company and the
Canadian Guarantors set forth in or arising under this Agreement shall be
Secured Obligations and are secured by all Liens granted by the Security
Documents.
7.12. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.
7.13. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY PARTY HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
OTHER SECURITY DOCUMENTS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH PARTY HERETO, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO SUCH PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 7.5; (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; AND (e) AGREES EACH PARTY HERETO RETAIN THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST ANY PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
7.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER SECURITY DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR THE
INTENTS AND PURPOSES OF THE OTHER SECURITY DOCUMENTS. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE OTHER
SECURITY DOCUMENTS, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
41
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH PARTY HERETO HAS ALREADY RELIED ON THIS WAIVER
IN ENTERING INTO THIS AGREEMENT, AND THAT EACH PARTY HERETO WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 7.14 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF OR TO THIS AGREEMENT OR ANY OF THE
OTHER SECURITY DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
THERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
7.15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
7.16. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
each party of written or telephonic notification of such execution and
authorization of delivery thereof.
7.17. ADDITIONAL OBLIGORS. The Company will cause each Subsidiary of
the Company that becomes an Obligor or is required by any Secured Debt Document
to become a party to this Agreement to become party to this Agreement, for all
purposes of this Agreement, by causing such Subsidiary to execute and deliver to
the parties hereto a Collateral Trust Joinder, whereupon such Subsidiary shall
be bound by the terms hereof to the same extent as if it had executed and
delivered this Agreement as of the date hereof.
7.18. APPOINTMENT OF SUB-AGENT FOR CONTROL AGREEMENTS.
(a) The Collateral Trustee hereby appoints the Credit
Agreement Agent as the agent of the Collateral Trustee with power and authority
to accept, hold, administer and enforce, for the benefit and subject to the
direction of the Collateral Trustee, all interests, rights and remedies under
any and all existing and future Control Agreements maintained in the name of the
Credit Agreement Agent.
(b) The Credit Agreement Agent accepts its appointment as
agent for the Collateral Trustee in respect of all Control Agreements which the
Credit Agreement Agent may elect to maintain in its name, but without any
obligation whatsoever to accept or maintain any Control Agreement. The Credit
Agreement Agent may at any time resign as agent for the Collateral Trustee,
subject to delivery to the Collateral Trustee of an instrument sufficient, in
the reasonable judgment of the Collateral Trustee, to permit the Collateral
Trustee to enforce directly, in its own name, all Control Agreements then
maintained in the name of the Credit Agreement Agent.
42
(c) If the Company or any other Obligor at any time maintains
deposits in a deposit account that are not subject to a Control Agreement
maintained in the name of the Credit Agreement Agent while acting as agent for
the Collateral Trustee, the Company or such Obligor will cause the depositary
bank promptly to execute and deliver to the Collateral Trustee a Control
Agreement over such deposit account and deposits therein in customary form. No
such Control Agreement will in any event be required, however, as to deposits in
deposit accounts consisting of Excluded Assets.
(d) Neither the Company nor any other Obligor will be required
to deliver to the Collateral Trustee a Control Agreement for any commodity
account or commodity contracts carried therein or for any securities account or
financial assets credited thereto, so long as the Collateral Trustee's Liens in
such securities account and financial assets are and remain otherwise duly
perfected.
7.19. TRANSFER OF THE EXISTING SECURITY DOCUMENTS. (a) The Existing
Collateral Agent hereby assigns and transfers to the Collateral Trustee,
unconditionally, irrevocably and forever, any and all of its Liens, claims,
interests, rights, powers and remedies under the Existing Security Documents,
effective without further act or condition immediately upon the execution and
delivery of this Agreement. Each transfer of Existing Security Documents is made
by the Existing Collateral Agent without any representation or warranty
whatsoever, except the warranty that it has not assigned or transferred whatever
interest or rights (if any) it may have been granted thereby.
(b) Promptly upon execution of this Agreement, the
Existing Collateral Agent will execute and deliver (and if necessary acknowledge
in recordable form) each of the instruments of transfer for the Existing
Security Documents set forth on Schedule 2.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Collateral Trust Agreement to be executed by their respective officers or
representatives hereunto duly authorized as of the day and year first above
written.
THE COMPANY:
CALPINE CORPORATION
By: /s/ Michael Thomas
-----------------------------------------
Name: Michael Thomas
Title:
43
THE CANADIAN GUARANTORS:
QUINTANA MINERALS (USA), INC.
By: /s/ Michael Thomas
-----------------------------------------
Name: Michael Thomas
Title:
JOQ CANADA, INC.
By: /s/ Michael Thomas
-----------------------------------------
Name: Michael Thomas
Title:
QUINTANA CANADA HOLDINGS LLC
By: /s/ Michael Thomas
-----------------------------------------
Name: Michael Thomas
Title:
44
THE CREDIT AGREEMENT AGENT:
THE BANK OF NOVA SCOTIA,
as Agent under the Credit Agreement
By: /s/ Denis P. O'Meara
-----------------------------------------
Name: Denis P. O'Meara
Title: Managing Director
45
THE 2007 TRUSTEE:
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ Michael W. Diaz
-----------------------------------------
Name: Michael W. Diaz
Title: Authorized Signer
THE 2010 TRUSTEE:
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ Michael W. Diaz
-----------------------------------------
Name: Michael W. Diaz
Title: Authorized Signer
THE 2013 TRUSTEE:
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ Michael W. Diaz
-----------------------------------------
Name: Michael W. Diaz
Title: Authorized Signer
46
THE TERM LOAN ADMINISTRATIVE AGENT:
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Term Loan Administrative Agent
By: /s/ R. T. Wagner
------------------------------------------
Name: Robert Wagner
Title: Authorized Signatory
47
THE COLLATERAL TRUSTEE:
THE BANK OF NEW YORK,
as Collateral Trustee
By: /s/ Michael Pitfick
-----------------------------------------
Name: Michael Pitfick
Title: Assistant Vice President
48
EXHIBIT A
COLLATERAL TRUST JOINDER
The undersigned, _____________________, a _______________,
hereby agrees to become party to the Collateral Trust Agreement dated as of
[______], 2003, by and among Calpine Corporation, a Delaware corporation,
[________________], as Collateral Agent under the Credit Agreement (as defined
therein), Wilmington Trust Company, as Trustee under the 2007 Indenture (as
defined therein), Wilmington Trust Company, as Trustee under the 2010 Indenture
(as defined therein), Wilmington Trust Company, as Trustee under the 2013
Indenture (as defined therein), Goldman Sachs Credit Partners L.P., as Term Loan
Administrative Agent under the Term Loan Agreement (as defined therein), and The
Bank of New York, as Collateral Trustee, for all purposes thereof on the terms
set forth therein, and to be bound by the terms of said Collateral Trust
Agreement as fully as if the undersigned had executed and delivered said
Collateral Trust Agreement as of the date thereof.
The provisions of Article 7 of said Collateral Trust Agreement
shall apply with like effect to this Joinder.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Joinder as of ___________________, 20____.
[_____________________________]
By:____________________________
Name:
Title:
EXHIBIT B
Recording requested by and
when recorded mail to:
The Bank of New York
101 Barclay Street, Floor 8 West
New York, New York 10286
Attn: Corporate Trust Administration
--------------------------------------------------
NOTICE OF ADDITIONAL ADVANCE
--------------------------------------------------
CALPINE CORPORATION
a Delaware corporation
(Taxpayer I.D. No. 77-0212977),
as Mortgagor
[and
[Trustees, if applicable,
as Trustee]
in favor of
THE BANK OF NEW YORK,
(Taxpayer I.D. No. 13-5160382),
in its capacity as Collateral Trustee, as Beneficiary
Dated as of [_______], 20__
50
This NOTICE OF ADDITIONAL ADVANCE, dated as of [_______], 20__ (this
"Notice"), is made by CALPINE CORPORATION (the "Company"), a Delaware
corporation, whose address is 1000 Louisiana Street, Suite 800 Houston, TX
77002, as trustor or mortgagor, in favor of [Trustees, if applicable, as the
"Trustee", and] THE BANK OF NEW YORK, a national banking association whose
address is 101 Barclay Street, New York, New York 10286, as Collateral Trustee
under the Collateral Trust Agreement and as Beneficiary under the Mortgages, as
"Beneficiary" hereunder.
This Notice relates to that certain [describe existing mortgages - will
need a Notice of Additional Advance to be recorded in each county in which the
prior mortgages were recorded] (as the same may have been, from time to time,
supplemented and/or amended, collectively the "Mortgages") by the Company in
favor of [the Trustee and] Beneficiary which (along with any supplements and/or
amendments and/or prior Notices of Additional Advance) has been recorded and
filed in the public records as set forth on Schedule I hereto. Capitalized terms
used, but not otherwise defined herein, shall have the meanings assigned to such
terms in the Collateral Trust Agreement dated as of July 16, 2003, among the
Company, Beneficiary and others (the "Collateral Trust Agreement"). The
Mortgages secure, among other things, (a) Priority Lien Debt pursuant to the
Amended and Restated Credit Agreement in an aggregate amount of up to
$700,000,000; (b) Parity Lien Debt pursuant to the 2007 Indenture, 2010
Indenture, 2013 Indenture and Term Loan Agreement in an aggregate amount of up
to $3,500,000,000, and (iii) any future debt constituting Priority Lien Debt or
Parity Lien Debt up to an aggregate amount of Secured Debt of $4,200,000,000.
This Notice provides notice that the Company has agreed to issue or
incur New Secured Debt as either Priority Lien Debt or Parity Lien Debt. The
Company represents and warrants to each of the Secured Debtholders and the
Beneficiary that the additional debt, when issued, shall constitute New Secured
Debt and that the New Secured Debt, together will all of the obligations of the
Company under the Secured Debt Documents executed by the Company in connection
therewith, shall be secured in accordance with the terms of the Mortgages,
together with all other Secured Debt and obligations secured thereby, without
any preference, distinction or priority as to lien or otherwise of any New
Secured Debt over any other Secured Debt by reason of any priority in time of
the issuance, sale or negotiation thereof, or by reason of the purpose of the
issuance, sale or negotiation thereof, or otherwise, except as otherwise
expressly provided in the Mortgages.
This Notice shall not constitute an amendment or modification of the
Mortgages or any other Secured Debt Document or the giving by the Beneficiary of
any consent, waiver or approval under the Mortgages or any other Secured Debt
Document, and no right of the holders of any Secured Debt shall be affected
hereby.
The Company hereby affirms and agrees that the Mortgages secure the
full payment and performance of each and every obligation stated therein to be
secured thereby, and continues to be effective as, and to constitute, a first
and prior lien and charge on the Mortgaged Property to the full extent of all
obligations secured thereby in accordance with and subject to the terms thereof.
Solely for the purpose of such affirmation of the effect of the Mortgages, the
Company does hereby re-grant, re-bargain, re-sell, re-warrant, re-alienate,
re-remise, re-release, re-convey, re-assign, re-transfer, re-mortgage,
re-hypothecate, re-pledge, re-set over and re-confirm, WITH
POWER OF SALE, [if applicable, to the Trustee] for the benefit and security of
the Beneficiary, the Mortgaged Property, in accordance with and subject to the
terms of the Mortgages.
The Company agrees that this Notice shall not prejudice any present or
future rights, remedies, benefits or powers belonging or accruing to the
Beneficiary under the terms of the Mortgages.
In the event of any conflict between the terms of the Mortgages and the
provisions of this Notice, the terms of the Mortgages shall control.
All certifications, representations, warranties and covenants of the
Company herein shall apply to and bind the heirs, administrators, executors,
legal representatives, successors and assigns of the Company and inure to the
benefit of the successors in interest of the Beneficiary.
2
IN WITNESS WHEREOF, the Company has executed this Notice effective as
of the date first set forth above.
CALPINE CORPORATION, a Delaware corporation
By: ________________________________________
Title: _____________________________________
Printed Name: ______________________________
ATTEST:
_________________________
Printed Name:
The name and mailing address of Mortgagor is:
Calpine Corporation
1000 Louisiana Street, Suite 800
Houston, TX 77002
3
SCHEDULE I
4